Erika Serow, head of Bain’s Americas Retail Practice, says the retail revolution has arrived
The Retail industry has undergone massive changes lately with the advent of digital and mobile shopping, proving a challenge for retail consultants to keep up with rapid shifts in consumer behavior. Erika Serow, Bain & Company’s newly appointed head of its Americas Retail Practice, says the industry experiences similar periods of disruption every 50 years or so. Starting with department stores in the mid 1800s, the shopping mall around the turn of the century, and the big box retailer in the 1960s. Each represents a revolution in retail that forever changed the way consumers shopped. Serow says Retail is at one of those pivot points right now, and retailers will have to evolve to keep up with the times or be consigned to the dustbin of history. Consulting magazine sat down with Bain’s newly minted leader of the America’s Retail Practice to discuss her new role, the market and the future of retail.
Consulting: What will some of your big priorities will be starting on day one?
Serow: We have had several record years of growth in our retail practice. We have strongholds in a couple of sectors of retail we’d like to expand, and we have the next generation of retail customers to grow. We have a lot to do and it’s an exciting time in retail to be taking the reins.
Consulting: With the advent of the Internet and mobile taking over, how do you see that changing the landscape going forward?
Serow: We talk about what’s happening in retail right now as the next evolution in a cycle that runs approximately 50 years. If you look at what’s happening now, it’s on the scale of magnitude with what happened in the 60s with Big Box retail when the Wal-marts of the world sort of began to take over. Back in the early 1900s you had shopping malls, which changed retail. then in the mid-1800s, department stores. So there’s this evolution of department store to mall to superstore to Internet and omni-channel and digital, and that’s where we are. If you think about how transformative each of those other elements have been to retail, we look at the industry as being at a literally twice-a-century pivot point in how people think about retail.
Consulting: What are clients demanding?
Serow: Our clients are going into this with their eyes open. Every great retailer recognizes the shift in what’s happening and are looking for ways to keep ahead of a curve. The expectations and behaviors change radically from year to year. So retailers are really looking for ways to stay ahead of the changing consumer behaviors in terms of knowing what’s coming next. Also the ability to build and transform organizations that have been relatively staid into quick-paced innovators, and trying to attract new generations of talent needed around really important omni-topics like digital marketing.
Consulting: In this kind of transformative environment, who comes out on top?
Serow: The retailers that will embrace what’s happening: customers going from being a store shopper to a retail shopper to an omni-channel shopper. For retailers that means attracting new talent, people who bring skills from outside of traditional retailing into the industry, it means making smart investments to keep up with the internet-only players who have been aggressively investing and innovating in the space. It means finding ways to delight the customers across all channels and find ways to keep the stores an asset for customers against those retailers that don’t have physical brick-and-mortar stores.
Consulting: How are you seeing that play out this season?
Serow: The biggest story of this year’s first big holiday weekend in terms of growth and traffic was actually on Saturday and Sunday. More stores opened on Thanksgiving, Cyber Monday saw a bump, but we saw the biggest online bump in online shopping on Saturday and Sunday where customers flocked to shopping online. Mobile is playing an increasing role in that. Fifty-nine percent of customers went online during the weekend, 44 percent made a purchase online.
Consulting: What steps are brick-and-mortars taking to stay relevant in this environment?
Serow: If you look at a lot of what’s happened this holiday, the retailers have been much more about delivering broader experiences. You saw a lot of early Thanksgiving openings and a lot of buzz around that. Cyber Monday has turned into Cyber Month more than anything; you see this extension there. So you’re seeing a major investment of making sure that what you’re doing on your tablet translates to your smartphone translates to your computer and translates to the store experience. What you’re seeing is so-called “traditional” retailers using their physical locations as a point of differentiation against players who only have online offerings, giving customers more reasons to come into stores.